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Latest UUK proposal: your questions answered

26 March 2018
| last updated: 18 April 2018

Sally's latest update for members:

'I sent out the proposal from Universities UK (UUK) on Friday. Thank you for all your questions and comments in response. I promised to answer as many questions as possible so, with apologies for the length of this message, here goes starting with those I have been asked most. Many of you also wanted to know my view as general secretary on this progress so I have included that too:

1. How did the proposal come about?

Last week I wrote to you setting out a response to UUK's unilateral announcement that it was setting up an expert panel to look at the valuation of the USS pension fund. I said such a panel would need to be jointly constituted and that the current proposal to axe the guaranteed pension would need to come off the table if the employers' plans were to have any credibility.

Throughout the week, working through ACAS, I have continued to press the employers on both these issues and the detail within.

The proposal from UUK is their final response to that pressure from UCU. It has been agreed by the UUK board and when I presented it to the wider group of UCU negotiators there was agreement that it should be immediately circulated to members.

2. Will I get a say on the proposal?

The higher education committee (HEC) will determine how members are consulted when they meet on Wednesday. This directly follows a meeting of USS branches. In line with UCU policy, members should have the final say.

3. The proposal is a big step forward but can we trust the employers?

The substantial concessions UCU has won have come from the strength of our strike action rather than any change of heart by the employers. For me the key question is not whether the employers have changed but whether the union can stay focused on our key demands and is prepared to continue to defend the guaranteed pension. I believe we are in a much better place to do that than we were just a few months ago.

4. How would the UCU members of the independent expert panel and the chair be selected?

It would be for HEC to decide who represents UCU on the panel following what will need to be a rigorous selection process. In my view, the union needs to make use both of the best actuarial professionals available and of the academic expertise within the union. The independent chair would need to be jointly agreed between UCU and UUK and to enjoy the confidence of both sides.

5. What power would the expert panel have?

The expert panel would be making recommendations to UCU and UUK about our joint approach to the valuation.

While the USS joint negotiating committee (JNC) is where pension benefits are formally discussed if the expert panel reaches agreement on these questions they will clearly be highly likely to form the basis of the approach to the JNC by both stakeholders.

6. Is it possible to have a no detriment clause [no loss in pension/no increase in contribution] in case the independent expert panel's findings are unhelpful?

UCU's arguments about the valuation methodology used by USS have been ignored by the employers for years. The new willingness to convene a joint independent panel to look at this is therefore a major achievement for UCU.

What is even more significant is that the employers now agree that the 'work of the [expert] group will reflect the clear wish of staff to have a guaranteed pension comparable with current provision.'

However given that no one yet knows what the independent panel will find my assessment is that it is extremely unlikely the university employers will go beyond this commitment and agree to a no detriment clause. In truth I find it hard to imagine any group of employers making such an open ended commitment - not least because the current agreement provides that any necessary future contribution increases are shared between the employer and members.

Therefore if you wish the union to further pursue a policy of no detriment whatever the result of the independent inquiry you should vote against the proposal when you get an opportunity to have a say.

7. Is the employers' proposal for a fully defined contribution pension really off the table?

The employers have now indefinitely suspended the USS consultation on their original proposal.

The current proposal makes clear in two places that they now recognise the importance of 'the guaranteed pension'. First in the acceptance that the expert group's work should reflect the wish of staff to have 'a guaranteed pension comparable to current provision'. Second, in a situation where the independent expert group reports that benefits or contributions may need to be adjusted it is now recognised that a 'guaranteed pension broadly comparable with current arrangements' must still be provided.

This new protection of the defined benefit principle is an enormous move from the employers' starting position that everyone should move onto a fully defined contribution (e.g unguaranteed) pension.

The likelihood of getting this group of employers to go further than this in protecting the principle of the guaranteed pension is slim, even with further rounds of industrial action.

8. What will the pension regulator do?

Both UCU and UUK have been in regular contact with the Pension Regulator (tPR) throughout the latest discussions. We do not want to put words in their mouth but if UCU members agree to the UUK proposal we believe the tPR will see value in a plan which has the backing of both stakeholders. The tPR will not give a formal view until there is a formal proposal in place.

9. What else is in the proposal?

UUK has also agreed to discuss a range of key issues with UCU including the question of inter-generational fairness and the unfavourable comparison between the Teachers' Pension Scheme (TPS) and USS. These are important discussions - the sector should be leading the way in the pension offer it makes to young and casualised staff not lagging behind.

10. What would UCU do if members agree to the proposal but then the USS board blocks it?

The USS board has three UCU and four UUK trustees out of a total of twelve board members. It meets in early April. My expectation is that the jointly expressed views of both stakeholders would have significant weight with the USS board. However, if for any reason the joint proposal was blocked or stymied my recommendation would be that our next wave of industrial action should continue as planned.

11. What happens to UCU's plans for strike action targeted at the assessment period?

These plans stay on while UCU consults on the proposal. If members agree in principle to the UUK proposal it would be sensible to stand down action only once the USS Board has confirmed its acceptance of the joint plan.

If members decide not to support the UUK proposal, the union will serve notice for the next round of fourteen days of strike action and we will make plans for a reballot of members with the aim of targeting admissions and other activities after the summer.

In the end it should be up to you.

12. What do you think of the proposal?

The union has moved the employers very substantially indeed since last November when they were determined to axe the guaranteed pension and replace it with a fully defined contribution scheme. We have come a long way.

In addition UCU has been trying to challenge the valuation methodology employed by USS for years. Now we have an independent review and the status quo in pension arrangements while it makes its deliberations. We also have a commitment from the employers to provide a guaranteed 'defined benefit' pension for the foreseeable future, even if there are future ups and downs in the fund, and a recognition from the employers of the importance of this guarantee in retirement to UCU members. Taken together these gains represent a remarkable achievement and they were won through the strike action taken by UCU members.

Of course the proposals are not perfect. My hope has always been that the employers agree with us to take on a tiny bit more risk in order to make short term pension costs more affordable for all. But in advance of the independent inquiry they are not prepared to do that and - overall - I find it difficult to imagine the employers collectively being prepared to provide better guarantees for the protection of the guaranteed pension than those we have achieved.

However this is not the same as saying that the proposal from UUK will magic all our problems away. It won't. The union will need to make sure the employers stick to their promises and we will need to make sure we are prepared to defend our pensions again if they are ever similarly threatened.

I also believe the employers now face a significantly changed union since last November when we began our battle in earnest. We are several thousand stronger for one thing. We have delivered the most effective, united industrial action ever seen in higher education and we have rolled back timetables which have previously been cast in stone. We will need to use this new strength not just to guard our pensions but also to really tackle the curses of casualisation, work overload and inequality that pervade so much of higher education. That is a big challenge but we are in a much better place to take it on now thanks to your action.

Thank you for taking the trouble to read this long message. Whatever your views, please participate in the debate within the union so that your voice is heard.